The Effects Of Tax Awareness And Tax Knowledge On Tax Compliance In Ghana

ABSTRACT

The purpose of this study was to investigate the effects of tax awareness and knowledge on tax compliance among SMEs., The researcher employed simple random sampling to arrive at the actual participants considered in the study.

Structured questionnaire with close-ended questions were used to solicit data from 150 respondents. Structural Equation Modelling was employed in the analysis of the data. The results showed that majority of the participants had no knowledge or attended any educational and sensitization programmes’ aimed at creating tax knowledge and awareness. The findings of the study revealed that electronic means, print media programmes and stakeholder sensitization programmes were statistically significant and positively influenced tax compliance among SMEs.

The study recommends that government and tax administrators should adopt innovative and technological systems of dealing with tax payers. The systems should be capable of reducing bureaucracies and corruption-related issues in tax processes including payment taxes as well as employing more electronic means of creating awareness and tax knowledge to enhance tax compliance.

Again, the study recommends that Ghana Revenue Authority should institute reward package system that will see SMEs who regularly honor their tax obligations over certain period being given some rewards to serve as an encouragement for other tax payers to emulate.